DOJ Warns Against Wrongful Use of Streamline Procedures

The U.S. Department of Justice is considering actions against taxpayers who wrongfully used the Streamlined Procedures to assert non-willful conduct. As quoted in Tax Notes Today:

“Speaking at the Federal Bar Association Section on Taxation annual tax law conference in Washington, Caroline Ciraolo, acting assistant attorney general in the Tax Division, said, “We are taking particular interest if we find evidence of an account holder claiming non-willful conduct in a streamlined compliance filing or delinquent submission only to find that evidence produced by the Category 2 banks suggests otherwise. We are using information gleaned from the program to open new investigations, pursue new targets around the globe, and we will continue to do so as the information is developed”

U.S. taxpayers with undeclared offshore accounts may be running out of time to come forward. The Foreign Account Tax Compliance Act (FATCA) will result in disclosure of all U.S. beneficial owners, whether that ownership is direct or indirect, and will result in penalties for unreported accounts.

“In the international tax arena, the message is crystal clear — time is of the essence. Come in now or face the consequences,” Ciraolo said. “The lack of public disclosure at this time should be in no way viewed as an action on the part of the Department of Justice or its law enforcement partners.”